Nations First Capital, LLC v. Jean G. Decembre ( 2021 )


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  •                                                                               FILED
    NOT FOR PUBLICATION
    MAY 14 2021
    UNITED STATES COURT OF APPEALS                      MOLLY C. DWYER, CLERK
    U.S. COURT OF APPEALS
    FOR THE NINTH CIRCUIT
    In re: NATIONS FIRST CAPITAL, LLC,                  No.   20-60037
    Debtor,                              BAP No. 19-1201
    ------------------------------
    MEMORANDUM*
    JEAN G. DECEMBRE, DBA Ale
    Transportation,
    Appellant,
    v.
    NATIONS FIRST CAPITAL, LLC,
    Appellee.
    Appeal from the Ninth Circuit
    Bankruptcy Appellate Panel
    Gan, Lafferty III, and Brand, Bankruptcy Judges, Presiding
    Submitted May 11, 2021**
    San Francisco, California
    *
    This disposition is not appropriate for publication and is not precedent
    except as provided by Ninth Circuit Rule 36-3.
    **
    The panel unanimously concludes this case is suitable for decision
    without oral argument. See Fed. R. App. P. 34(a)(2).
    Before: THOMAS, Chief Judge, MILLER, Circuit Judge, and RESTANI,***
    Judge.
    Jean Decembre appeals from a decision by the Bankruptcy Appellate Panel
    (“BAP”) reversing the bankruptcy court’s vacatur of an order disallowing
    Decembre’s claim against debtor Nations First Capital (“NFC”). We have
    jurisdiction under 
    28 U.S.C. § 158
    (d)(1), and we affirm.
    I
    We review the BAP’s decision de novo and may affirm “on any ground
    supported by the record.” Cal. Franchise Tax Bd. v. Kendall (In re Jones), 
    657 F.3d 921
    , 924 (9th Cir. 2011) (citation omitted). “[A]pply[ing] the same standard
    of review that the BAP applied to the bankruptcy court’s ruling,” Brace v. Speier
    (In re Brace), 
    979 F.3d 1228
    , 1232 (9th Cir. 2020), we ask whether the bankruptcy
    court abused its discretion when it denied Decembre relief under Federal Rule of
    Civil Procedure (“Rule”) 60(b)(1), but granted him relief under Rule 60(b)(6). See
    Phillips v. Gilman (In re Gilman), 
    887 F.3d 956
    , 963 (9th Cir. 2018) (reviewing
    bankruptcy court’s order granting Rule 60(b) relief for an abuse of discretion).
    The bankruptcy court abuses its discretion if it does “not identify the correct legal
    rule.” USAA Fed. Sav. Bank v. Thacker (In re Taylor), 
    599 F.3d 880
    , 887–88 (9th
    ***
    The Honorable Jane A. Restani, Judge for the United States Court of
    International Trade, sitting by designation.
    2
    Cir. 2010). We accept the bankruptcy court’s factual findings “unless [they] leave
    the definite and firm conviction that a mistake has been committed.” Khan v.
    Barton (In re Khan), 
    846 F.3d 1058
    , 1063 (9th Cir. 2017); see also United Student
    Funds, Inc. v. Wylie (In re Wylie), 
    349 B.R. 204
    , 211 (B.A.P. 9th Cir. 2006) (“The
    bankruptcy court’s factual findings regarding service of process and other
    documents are reviewed for clear error.”).
    II
    The BAP properly held that the bankruptcy court properly declined to grant
    Decembre relief from the order disallowing his claim (“Disallowance Order”)
    under Rule 60(b)(1), but erred in granting him relief from that order under Rule
    60(b)(6). See 
    11 U.S.C. § 502
    (j) (“A claim that has been allowed or disallowed
    may be reconsidered for cause.”); Fed. R. Bankr. P. 9024 (providing that Rule 60
    applies to motions for relief from a judgment or order in a bankruptcy case); see
    also Wylie, 
    349 B.R. at 209
     (explaining that motions for reconsideration of a claim
    disallowance filed “after the 10-day appeal period has expired” are “subject to the
    constraints of [Rule] 60(b) as incorporated by [Bankruptcy] Rule 9024”).
    3
    A
    The bankruptcy court properly declined to conclude that Decembre’s failure
    to timely respond to NFC’s claim objection resulted from “excusable neglect”
    within the meaning of Rule 60(b)(1). See Fed. R. Civ. P. 60(b)(1) (permitting a
    court to relieve a party from an order upon a showing of “mistake, inadvertence,
    surprise, or excusable neglect”). Decembre has not demonstrated that any of the
    following factors favor Rule 60(b)(1) relief on the basis of excusable neglect: “the
    danger of prejudice to the debtor, the length of the delay and its potential impact on
    judicial proceedings, the reason for the delay, including whether it was within the
    reasonable control of the movant, and whether the movant acted in good faith.”
    Iopa v. Saltchuk-Young Brothers, Ltd., 
    916 F.3d 1298
    , 1301 (9th Cir. 2019) (per
    curiam) (quoting Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P’ship, 
    507 U.S. 380
    , 395 (1993)).
    The length of the delay between entry of the Disallowance Order and
    Decembre’s request for relief from that order—roughly two months—was
    substantial. See Harvest v. Castro, 
    531 F.3d 737
    , 747 (9th Cir. 2008) (concluding
    that 64-day delay was “substantial” and cut against granting Rule 60(b)(1) relief).
    Additionally, the explanation that Decembre’s counsel provided for the delay does
    not demonstrate a genuine, good faith mistake. The proof of service for the
    4
    objection and notice of hearing reflects that NFC properly mailed those documents
    to counsel’s law firm (consistent with Decembre’s request in his proof of claim)
    and Decembre’s personal address.1 Counsel’s bare assertions that he did not see
    and “doubts that his office received” this mail do not overcome the presumption of
    receipt. See Moody v. Bucknum (In re Bucknum), 
    951 F.2d 204
    , 207 (9th Cir.
    1991) (per curiam). Although counsel may have been unaware of the claim
    objection because of garden-variety negligence on his or his staff’s part, there is no
    explanation to that effect in the record. Decembre has also failed to explain how
    the prejudice factor favors a finding of excusable neglect. See Iopa, 916 F.3d at
    1301.
    The BAP properly concluded that the bankruptcy court properly denied Rule
    60(b)(1) relief. Compare Tracht Gut, LLC v. Los Angeles Cnty. Treasurer & Tax
    Collector (In re Tracht Gut, LLC), 
    836 F.3d 1146
    , 1155 (9th Cir. 2016) (affirming
    denial of Rule 60(b)(1) relief where the movant failed “to identify any instance of
    neglect that was excusable”) with Gilman, 887 F.3d at 963–64 (affirming grant of
    Rule 60(b)(1) relief where counsel explained that she failed to respond to an
    1
    On appeal, Decembre takes issue with the fact that NFC addressed the mail
    to “Jean G. Decembre c/o Crowley & Crowley,” rather than to Crowley himself.
    NFC addressed the mail in the manner that Decembre requested in his proof of
    claim. In any event, because Decembre did not raise this issue below, we need not
    consider it. See Hillis v. Heineman, 
    626 F.3d 1014
    , 1019 (9th Cir. 2010).
    5
    objection “because of a calendaring error,” “her secretary’s disability,” and the fact
    that she had “too many balls in the air”).
    B
    The BAP did not err in holding that the bankruptcy court should have
    declined to vacate the Disallowance Order under Rule 60(b)(6). Under that catch-
    all provision, a court may relieve a party from an order for “any other reason that
    justifies relief,” Fed. R. Civ. P. 60(b)(6), but only “to prevent manifest injustice”
    and “only where extraordinary circumstances prevented a party from taking timely
    action.” Zurich Am. Ins. Co. v. Int’l Fibercom, Inc. (In re Int’l Fibercom, Inc.),
    
    503 F.3d 933
    , 941 (9th Cir. 2007) (quoting United States v. Washington, 
    394 F.3d 1152
    , 1157 (9th Cir. 2005)); see also Delay v. Gordon, 
    475 F.3d 1039
    , 1044 (9th
    Cir. 2007) (Rule 60(b)(6) “applies only when the reason for granting relief is not
    covered by any of the other reasons set forth in Rule 60.”). Decembre did not
    demonstrate such circumstances. The bankruptcy court improperly granted relief
    on the sole ground that Decembre had a “potential meritorious defense” to NFC’s
    claim objection. See United States v. Signed Pers. Check No. 730 of Yurban S.
    Mesle, 
    615 F.3d 1085
    , 1091 (9th Cir. 2010) (explaining that a court “must consider
    three factors,” any of which, if met, is alone “sufficient reason for the district court
    to refuse to set aside the default” (quotation marks omitted)).
    6
    AFFIRMED.
    7